Use of Electronic Invoicing Expected to Grow Rapidly
In the not-too-distant future, one form or another of electronic data interchange will be as common in business as present-day accounting systems. Moreover, EDI will greatly affect the way business transactions are conducted around the world.
EDI is the electronic exchange of information within a company or between a company and its customers, suppliers, bankers--any organization the company does business with. For example, using EDI, a company’s computer generates an invoice, uses a dial-up communications line to connect to another computer system and sends the information electronically.
A $130-million industry in 1987, EDI skyrocketed to more than $300 million in 1989 and is expected to reach $2 billion by 1995.
About 75% of the Fortune 100 companies and 39% of the Fortune 500 use EDI. The most active users are in transportation, retailing, automobile manufacturing, warehousing, pharmaceutical distribution and government.
The Automotive Industry Action Group says 1,700 suppliers to Chrysler assembly plants are tied to Chrysler by EDI, and by the end of 1990 another 1,800 will be hooked up.
Pacific Bell uses EDI to practice just-in-time inventory management. Since 1988, six Pac Bell warehouses have been closed, with annual savings of $200,000.
By eliminating clerical work and mailing, EDI cuts as many as five days from the processing of Pac Bell’s purchase orders. Now its vendors can respond to an order within two days.
Texas Instruments began using EDI in 1969. The company trades about 30 types of documents with more than 1,000 customers, suppliers, banks and carriers.
Wal-Mart is operating the largest EDI program in the retail industry. It has converted as many as 70 suppliers monthly to EDI, and the company’s EDI transactions represent about 75% of its payments to suppliers.
Start-up costs for EDI vary widely. For less than $2,000, two companies can install a simple data-exchange system based on personal computers. A system linking 20 companies and handling more complex data costs $200,000. Top-end systems cost $2 million. Not surprisingly, EDI manufacturers say a system can pay for itself in less than three years.
A number of surveys appear to verify the boast. An estimated 7% of corporate spending goes for sending invoices, processing sales orders and similar administrative functions. In most cases, EDI can cut the costs in half.
Flat-Panel Display War Is Coming
The flat-panel display market still is in its infancy, and battle lines for market share are beginning to form.
Cathode-ray tube (CRT) technology is the current low-cost favorite but is losing ground to flat-panel displays that are more efficient and portable. CRTs are typically used in desktop computers (and television sets); flat-panel displays are used in laptop computers.
Of the four flat-panel technologies fighting for dominance, liquid crystal display is the most likely to prevail.
Such major players as Sharp, Hitachi, Toshiba and Seiko-Epson are increasing their investments in plants and equipment, while new players continue to jump in.
The LCD industry is expected to become one of the major electronics industry segments within five years, with a worldwide market of $6.7 billion.
One of the first volume applications of LCDs was in digital wristwatches, which began appearing in the 1970s.
By 1980, technology made possible a larger display size and improved display features. Gradually, applications grew beyond the wristwatches and calculators of the 1970s to the handheld computers of the early 1980s.
Recently, dramatic improvements in LCD technology have expanded the markets in which LCDs compete with CRTs. Although CRTs lead in cost and performance, power consumption and size considerations are becoming important issues for the computer industry.
Thin-film transistor technology provides the best flat-panel display quality. But its manufacturing cost is very high.
The LCD industry’s major goal is to displace CRT displays with full-color LCDs. For that purpose, it is necessary for the industry to pursue thin-film transistor technology by spending a lot of money on research and development in addition to making heavy capital investments.
Right now, growth in the LCD industry is being driven largely by an increase in demand for laptop personal computers that incorporate large LCDs.
The color LCD market for microcomputers is expected to approach $2.7 billion, or 40% of the total LCD market, by 1995.
